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Like all industries, we tend to use jargon. The definitions below may assist you in dealing with real estate companies in new south wales.
CONTRACT
A document which contains the details of a property and the conditions of sale. If you are considering selling, the first thing you should do is organise to have a contract prepared through your conveyancer. We can recommend a good local conveyancer for you. A real estate agent cannot start advertising or taking buyers to a property until this document is held in their office.
COOLING OFF PERIOD
As a seller, once you have accepted an offer and exchanged contracts, a 5 day cooling off period begins. This allows the buyer to conduct building and pest inspections, have your contract looked at by their conveyancer /solicitor, etc. If you are selling by auction, there is no cooling off period. With an Auction, a 10% deposit is paid on the spot and contracts are exchanged immediately.
GOOD-WILL DEPOSIT
If the contracts are exchanged with a 5 day cool off, the purchaser is required by law to put down a good will deposit of 0.25% of the sale price. If they pull out for any reason within the 5 day cool off period (except for death or mental disability), the seller keeps the good will deposit.
DEPOSIT
At the end of the cooling-off period, the buyer must pay their deposit to secure the sale (normally 10%). The deposit is held by your agent in a trust account.
EXCHANGE CONTRACTS
Once the good will deposit is paid, your agent will get you to sign the contract. The buyer signs an identical copy and both are sent to the solicitors/conveyancers.
SETTLEMENT PERIOD
Once contracts are exchanged, the settlement period begins (standard is 42 days but can be more or less). You can use this time to find another home (if you have not already), organise finance and move out.
SETTLEMENT
The buyer pays the balance of the purchase price and picks up the keys. Normally your bank and conveyancer will take their fees out of the settlement proceeds and send you a cheque for the balance. Your estate agent will probably take their commission from the deposit and send you a cheque for the balance held in their trust account.
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